Income, Expenditure and Affordability Notes

Unipol Student Homes

The UK Student Accommodation Forum- Income, Expenditure and Affordability

Thursday 25th February, 11 AM-12:00 PM

A conversation on current trends in the Student Accommodation industry - brought to you by Unipol.

Guest Speakers: Martin Blakey (CEO, Unipol), Sarah Jones (Cushman and Wakefield), Nick Hillman (HEPI)

 

Martin Blakey – Hot Topics

  • New guidance released for Higher Education on 22nd Feb 2021 – Face to face teaching can resume for courses with practical elements from 8th March. Online teaching should remain in place for students on courses who can reasonably continue their studies remotely
  • Providers are encouraged to contact their local HEIs to determine their individual plans for students returning – some may be planning to extend 3rd term
  • Many students have already returned to their place of study – number is expected to increase over the coming weeks regardless of government changes
  • Unipol return rates – around 71% in Leeds PBSA sites and 55% in Nottingham PBSA Sites. There is an estimated occupancy level of 70% in offstreet HMO properties
  • National occupancy levels – it is estimated that around 55% of students are present in University operated accommodation, 70% in PBSA and 68% in offstreet HMO
  • It is not illegal for students to return to their place of study – however it is illegal for students to travel to their out of term address once they have moved back
  • What will the 3rd term look like – although the 3rd term is usually a ‘sweep up’ term with limited teaching and mostly exams/assessment, it is likely a number of Universities will be looking at running a full 3rd term offering if they can
  • If the entirety of the 3rd term remains online, many students will see this year as a ‘write off’
  • Rent refunds – these have been less generous and widespread as the previous lockdown, and many are time limited to the period of lockdown.
  • However there are big positives to be taken from the approach of the PBSA sector – there has been a bette line taken on releasing students who make a special case for tenancy release. Little to no instances of internationals who have been unable to travel not being released from their tenancies.
  • Rent strikes – the movement is only strong/prevalent in Manchester, Bristol and some parts of London. There is a mixed agenda of these rent strike campaigns, with many campaigning on rent levels more generally, and wider issues such as mental health support and standards.

Sarah Jones – analysis of income and expenditure

  • The main questions:
    • What money do students have to spend?
    • How is maintenance loan set
    • Understanding the cost of living for students
  • The positive and negatives of the existing datasets
    • Government dataset – the most comprehensive data available, and once reviewed it has huge potential for impact. However, it is massively out of date and inaccessible to utilise as a consumer at over 400 pages long
    • Private sector – data is consumer and user friendly. However there is instances of reporting bias, being politically loaded and giving patchy advice. They also only take into account monthly costs in terms of income and expenditure and not the whole process of ‘going to university’
  • Mind the Gap
    • The data shows that the Government don’t pay the whole cost of the University – in England there is around a £3000 gap to be made up
    • Budgeting tools never quite seem to say that income from jobs, parents, savings will be necessary
    • Many within the sector are lobbying for a direct acknowledgement of the parental contribution to topping up this gap
  • Missing Information
    • Up to date understanding of real income and expenditure
    • Overall costs of ‘going to University’ and not just the weekly cost e.g. technology and materials cost
    • Visibility of the methodology behind student maintenance loans and its relation to household income
    • When was maintenance loan calculation last reviewed
  • Is Accommodation affordable?
    • UK students going away from home to study are finding the money for accommodation or they are staying at home
    • The test case of Covid-19 on occupancy – removing internationals in London has shown low occupancy levels across the board
    • Implications for affordable accommodation – London Plan uses the maximum maintenance loan as its reference (and only half of students receive the maximum)
    • This cannot be clearly defined with lack of up to date data
  • Practical measures to fill the data gap
    • Keep building the datasets
    • Be aware of faster rent rises and effects on demand/early warning signs
    • Lobby the Government to complete to SIES 2019/20
    • Differentiate between price and value for money

Nick Hillman – HEPI

  • The delays to the Governments income and expenditure research is unacceptable- we must push for this to be carried out
  • Overall the focus of the argument on income and expenditure need stop focus on maintenance loans/grants and not fees
  • There is a hidden cost when students go to University – parents don’t expect to pay as much in support as is required
  • Level of maintenance has floated for 3 reasons:
    • Political – increase in maintenance support in 2012/13 after rise in fees the previous years
    • Electoral – One of Gordon Brown’s first acts was increasing maintenance grants in 2008/09
    • Technical – Abolition of maintenance grants but an increase in maintenance loan amounts
  • Universities are now in the press more often over fee/money related issues as these are now seen as consumer stories rather than policy stories